Sony's strategy of seeding the market with PlayStation 3 game consoles that came with Blu-ray Discs playback ability looks fairly prescient now, though it didn't at the time.
After a boffo market entrance--fans queuing up for days to buy the next-generation consoles--in late 2006, Sony had to deal with a lot of bad press for product shortages and the success of the Xbox 360, and the sudden popularity of the Wii from Nintendo. Blu-ray's inclusion in the PS3 was a major reason for product shortages and was responsible for the high price of the console.
Sony was able to claim in January 2007 that it had 1 million Blu-ray players sold. But those were largely PS3 sales. At the time, since the battle with HD DVD was still in full swing, it wasn't clear that Sony's strategy on Blu-ray had worked.
HD DVD's demise gives new perspective. Sony doesn't break out how many standalone players it has sold from the number of PS3s, but according to DisplaySearch shipment estimates, in the third quarter of 2007, Sony accounted for nearly 96 percent of Blu-ray devices worldwide. In conjunction with point-of-sale data collected by the NPD Group that shows Sony and Samsung collectively accounted for 87 percent of Blu-ray Disc standalone player sales in December alone, Sony is already the dominant player. Samsung is its closest competitor, but the royalties earned on manufacture of the discs and players give Sony much more room to be competitive.
Sony won't comment on any future business plans for the company, but it can now move full-speed ahead on its HD strategy in the living room, which it's been laying out over the last year or so.
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